Latvia pegged to the SDR soon after its new currency was introduced in 1993, and moved gradually to indirect monetary instruments; the peg was switched to the euro within ERM2 in 2005, and from there Latvia entered EMU in 2014.
|Years||Targets and attainment||Classification|
|1993||two-tier banking system from 1992; new Latvian currency introduced March-June 1993; exchange rate moving widely; monetary policy instruments initially limited but rapid change||Unstructured discretion UD|
|1994-2013||1994-2004 exchange rate pegged to SDR, with margins of +/- 1%; central bank dominates FX market but other agents allowed to trade at their own rates; monetary instruments increasingly indirect as financial markets develop, with OMOs replacing forex swaps in mid-2000s; 2005 currency repegged to euro January and into ERM2 April, narrow margins maintained||FERT|
|2014-17||membership of European Monetary Union||currency union CU|
Selected IMF references: RED 1994 pp37-40, 65-6, 94; RED 1995 pp18-22, 23-5, 79; RED 1996 pp9-10, 51-2; SR 2004 p13; SR 2010 pp6-7; SR 2012 pp29-30.
Additional source: Beblavý (2007b).
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